The Census Bureau's April residential construction release paints a picture of a housing sector that is broadly resilient but experiencing a pullback in single-family activity, according to analysis circulated by DA Davidson.
Overall housing starts in April reached a seasonally adjusted annualized rate of 1.47 million, a 3% decline from March's pace but a 5% increase versus the same month a year earlier, a gain driven by stronger multifamily activity. Single-family starts were recorded at a 930,000 annualized rate in April, down from March.
Measured on a year-over-year basis, the single-family starts rate fell 2%. On a month-over-month basis, the single-family starts rate was 9% lower than in March. Single-family permitting in April registered a rate of 872,000, representing a 3% decrease from March and a 6% drop compared with April of the prior year. DA Davidson notes that the single-family permitting rate has largely held within a range of 850,000 to 900,000 since mid-2025.
Multifamily construction continued to outpace the prior year, with multifamily starts in April up 23% year-over-year. This disparity between the single-family and multifamily segments helped lift total starts despite weakness in the single-family category.
Regional performance year-to-date shows variation across the country. The Midwest led with single-family starts up 5% year-over-year. By contrast, the South was down 5%, the West down 6%, and the Northeast down 19% on a year-to-date basis.
The count of units under construction extended a stretch of year-over-year declines to 33 months. Total units under construction were 9% lower than a year earlier, while single-family units under construction were 7% lower. Sequentially, units under construction have been stable since the start of the year.
Production builders have made measurable progress in trimming unsold inventory through the latter part of 2025 and into early 2026. Despite that improvement, builder sentiment remains strained; the Housing Market Index continues to sit well below the neutral 50 mark, reflecting ongoing caution among builders. Industry forecasters, as cited by DA Davidson, expect low single-digit year-over-year declines in both single-family and total housing starts for 2026.
Against that backdrop, DA Davidson reiterated Buy ratings on Trex Company (NYSE:TREX) and Louisiana-Pacific (NYSE:LPX), assigning both firms Top Pick status. The firm highlighted that each company derives a relatively greater portion of its revenue from repair and remodeling exposure within its core businesses, a positioning DA Davidson favors given the current market dynamics.
Contextual note: The data indicate a market divided between a cooling single-family segment and a strengthening multifamily segment, with implications for builders, material suppliers, and firms exposed to repair and remodeling demand.